By Ghazal Ahmed
Publication Date: 2026-01-27 08:19:00
International Business Machines Corporation (NYSE:IBM) is one of the AI Stocks Analysts Are Watching. On January 22, Stifel analyst David Grossman reiterated a Buy rating on the stock with a $325.00 price target. The firm sees IBM as a safe compounder benefiting from software-led growth, margin expansion potential, and even upside from its post-mainframe cycle anniversary.
According to the research firm, IBM is trading at a 40% premium to equal-weight S&P 500 multiple, broadly in line with its long-term average range of 20-55%, but above the pre-2025 trend of around 10-20%.
This re-rating is a reflection of several factors, including better software execution, margin improvement, defensive characteristics, and possibly the mainframe cycle effect.
Stifel anticipates organic software growth of around 7-8%, consistent with 2025 performance. Software acquisitions are also likely to provide organic growth tailwinds into 2027. Meanwhile, services fundamentals, which…
